Last year, an experienced executive from the American software industry in Silicon Valley took the helm of a startup in his home country, according to company records. The startup informed potential investors that it would sell software for designing microchips that is primarily available from very few major Western companies.
The Importance of OPC Technology
The highly specialized and sought-after OPC tool, known by its acronym OPC, is critical in designing many microchips and is essential in advanced chip design.
Challenges of Containing China
Advanced chip production is one of the most contentious technological battlegrounds currently dividing the United States and China in their race for economic and military dominance. Washington is trying to restrict China’s access to sensitive microchip design tools.
Startup SEIDA’s Strategy
Before Lego “Rico” Zhang became the CEO of SEIDA, he lived in the U.S. long enough to obtain permanent residency and buy a home in Silicon Valley, according to people familiar with his career and public records reviewed by Reuters.
Startup’s Response to Challenges
SEIDA is committed to U.S. and Chinese laws, according to statements by Chang, the company’s chief operating officer. SEIDA or its officials have not been accused of any wrongdoing. Reuters has no evidence that SEIDA has used knowledge or technology that could be considered proprietary to Siemens EDA or other companies.
Western Challenges Against Chinese Technological Advancement
The story of SEIDA, previously unreported, illustrates the challenges the West faces in hindering China’s advancement in advanced chip technology. Despite Washington’s efforts to slow China’s acquisition of chip technology, Beijing is accelerating its local development and attracting expatriate experts to return to China to overcome its lag in this sector.
Technological Developments in China
A spokesperson for the Chinese Foreign Ministry stated that the U.S. is “abusing export control measures” and “imposing illegal unilateral and long-term sanctions on Chinese companies.” The Chinese spokesperson added that China has enacted laws to protect intellectual property and “is committed to internationally accepted rules.” He affirmed that technological advancements in China “are not the result of theft or pillaging, but the result of the skill and hard work of the Chinese people.”
Challenges Facing the United States
U.S. officials have repeatedly asserted that China’s efforts to acquire Western technology pose one of the biggest long-term threats to the U.S. economy and security. They have expressed particular concern about China’s ability to use advanced chips and powerful processors for its rapidly growing military purposes.
Chip Development in China
Advanced chips are a central issue in China’s government plans for more sophisticated technological development. Last year, Beijing announced that the government would spend $143 billion to bolster the domestic chip sector in China. Through a separate program known as “Thousand Talents,” the government offers jobs, housing, and other incentives to Chinese experts returning from science and technology jobs abroad.
China’s Challenges in Advanced Chip Production
Among the challenges China faces in producing more advanced chips is access to EDA tools, such as the OPC software that SEIDA is early marketing. Producing chips and electronic circuits that are faster and more capable of being designed and printed involves billions of incredibly small switches. To achieve such microscopic connections, EDA tools assist in arranging and verifying designs and simulating their performance under real-world conditions.
China’s Progress in Chip Technology
Despite U.S. export restrictions, China is making progress. In 2019, the U.S. Department of Commerce placed Huawei Technologies, the Chinese telecommunications giant, on its list of companies that cannot purchase U.S. technology unless the seller obtains a special license. SMIC, which operates with state funding and is based in Shanghai, was added to the list a year later, based on national security concerns from the U.S.
Identifying
Source of Technology
Identifying the source of some technology can be challenging. Many developments in the chip industry rely on existing intellectual property. The movement of employees within the industry, especially across international borders, can make it difficult to investigate export violations or follow up on claims of intellectual property theft. “You can’t control what’s going on in people’s minds with any export control regulations,” according to Lewis from CSIS.
Impact of Chinese Startups
SEIDA, which has not been reported before, is an example of the challenges the West faces in hindering China’s development of advanced chip technology. Despite Washington’s efforts to slow China’s acquisition of chip technology, Beijing is accelerating efforts to promote local development and attract expatriate experts to return to China to overcome its lag in this sector.
Investment in SEIDA
SEIDA’s efforts have attracted strong Chinese investors. According to recent corporate reports reviewed by Reuters, one of the investors is an investment unit of Semiconductor Manufacturing International Corp or SMIC. This state-backed company, based in Shanghai, is considered the largest semiconductor producer in China. U.S. companies are restricted by Washington from supplying SMIC with technology without special licenses, as its alleged work with the Chinese military is considered a threat to U.S. national security.
SEIDA’s Progress in Selling OPC
Reuters was unable to determine whether SEIDA has made progress in selling OPC. The software is commonly used in the design of many semiconductors and is part of a broader set of technologies known as electronic design automation or EDA. These tools can aid in designing chips that can enhance emerging strategic technologies such as artificial intelligence, quantum computing, and hypersonic flight.
U.S. Efforts to Restrict China
Since SEIDA’s launch in October 2021, the U.S. government has increased its efforts to restrict China’s access to EDA tools, which have been mainly developed and sold by U.S. companies. Through export controls and other restrictions, Washington aims to prevent China from gaining knowledge that could allow it to keep pace with advancements in advanced chips from the U.S. and its allies, including Taiwan, the self-governing island that China claims and is the largest semiconductor producer in the world.
Impact of U.S. Restrictions on SEIDA
According to email correspondence with Reuters, Chang stated that U.S. restrictions were one of the reasons that drove Zhang and his colleagues to leave Siemens EDA and join SEIDA in the first place. He added that the restrictions limited their job opportunities at Siemens EDA and “reduced the scope for professional advancement and participation in major projects.”
Impact of Chinese Firms in the Market
According to sector experts and individuals familiar with Beijing’s efforts to overcome U.S. restrictions on technology transfer, SEIDA’s launch follows a pattern of Chinese firms capitalizing on foreign knowledge. Even if SEIDA’s executive leaders did not take proprietary information from their former employer, the relevant technologies are complex enough that individuals with years of experience with current suppliers cannot simply replicate similar products.
China’s Enhancement of Technological Development
The story of SEIDA, which has not been reported before, illustrates the challenges that the West faces in hindering China’s development of advanced chip technology. Despite Washington’s efforts to slow down China’s acquisition of chip technology, Beijing is accelerating efforts to promote local development and attract expatriate experts to return to China to overcome its lag in this sector.
China’s Impact on the U.S. Economy and Security
U.S. officials have repeatedly emphasized that China’s efforts to acquire Western technology pose one of the biggest long-term threats to the U.S. economy and security. They have expressed particular concern about China’s ability to use advanced chips and powerful processors for its rapidly growing military purposes.
Impact
American Restrictions on China’s Development
According to Michael Brooke, the former CEO of Intel in China, American restrictions will lead to enhanced independence for China. “The United States is trying to be an obstacle to China but will merely become a speed bump,” said Brooke. “This will push China to become more self-reliant.”
China’s Government Plan to Enhance Chips
The Chinese government has made the development of more advanced chips a focal point of its strategic plans. Last year, after Washington announced new restrictions, Beijing announced that the government would spend $143 billion to boost the local chip sector in China. Through a separate program known as “Thousand Talents,” the government is offering job opportunities, housing, and other incentives to Chinese experts returning from science and technology jobs abroad.
Challenges Facing China in Producing Advanced Chips
Among the challenges facing China in producing more advanced chips is access to EDA tools, such as the OPC software promoted by SEIDA in early marketing. Producing chips and faster electronic circuits involves billions of very small switches. To achieve such microscopic connections, EDA tools help in organizing and verifying designs and simulating their performance under real-world conditions.
China’s Progress in Chips
Despite U.S. export restrictions, China is making progress. In 2019, the U.S. Department of Commerce placed Huawei Technologies, the Chinese telecommunications giant, on its list of companies that cannot buy U.S. technology unless the vendor obtains a special license. SMIC, state-funded and based in Shanghai, was also added to this list a year later, based on national security concerns from the U.S.
Identifying the Source of Technology
Identifying the source of some technologies can be challenging. Many developments in the chip industry rely on existing intellectual property. Employee movement within the industry, especially across international borders, can make it difficult to investigate export violations or pursue claims of intellectual property theft. “You can’t control what goes on in people’s minds with any export regulations,” according to Lewis from CSIS.
Impact of Chinese Startups
SEIDA, which has not been previously reported, is an example of the challenges faced by the West in hindering China’s development of advanced chip technology. Despite Washington’s efforts to slow China’s acquisition of chip technology, Beijing is accelerating its drive to enhance local development and attract returning expatriate experts to overcome its lag in this sector.
Investment in SEIDA
SEIDA’s efforts have attracted powerful Chinese investors. According to recent corporate reports reviewed by Reuters, one investor is an investment arm of Semiconductor Manufacturing International Corp or SMIC. This state-backed company based in Shanghai is regarded as the largest semiconductor manufacturer in China. U.S. companies are restricted by Washington from supplying SMIC with technology without a special license, as its alleged collaboration with the Chinese military poses a threat to U.S. national security.
SEIDA’s Progress in Selling OPC
Reuters was unable to ascertain whether SEIDA has made progress in selling OPC. The software is commonly used in the design of many semiconductors and is part of a broader set of technologies known as electronic design automation or EDA. These tools can assist in designing chips that could enhance new strategic technologies like artificial intelligence, quantum computing, and hypersonics.
U.S. Efforts to Restrict China
Since SEIDA’s launch in October 2021, the U.S. government has intensified its efforts to restrict China’s access to EDA tools, which are primarily developed and sold by American companies. Through export controls and other restrictions, Washington aims to prevent China from obtaining knowledge that could allow it to keep pace with advances in advanced chips from the U.S. and its allies, including Taiwan, the self-governing island claimed by China that is the largest chip producer in the world.
Impact
American Restrictions on SEIDA
According to email correspondence with Reuters, Chang said that U.S. restrictions were one of the reasons that prompted Zhang and his colleagues to leave Siemens EDA and join SEIDA in the first place. He added that the restrictions limited their job opportunities at Siemens EDA and “that they reduced
Source: https://www.aol.com/u-wants-contain-chinas-chip-120318040.html
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